General Motors: Ignition Switches

If you caught Saturday’s SNL sketch of Mary Barra, General Motors’ CEO, you’ll know that the brand has taken another hit to its reputation in the past few weeks. As of the beginning of April, the “too big to fail” automobile manufacturer’s number of recalls has hit 4.9 million vehicles in the United States, roughly six times that of its total recalls in 2013. Oops.

The string of call-backs began with the Chevrolet and GMC pick-ups as well as some of its compact cars. These smaller recalls were followed by a more troublesome one: defective ignition switches in General Motors’ (GM) compact cars that have been linked to thirteen deaths. To add insult to injury, the brand has since admitted knowledge of the defective ignition switches, failing to recall them for just under a decade. According to the media, however, it’s just one more thing to add to Mary Barra’s list of things to look into. The defects, unknown to management, were instead signed off by lead designer Ray DeGiorgio in 2006 and taken no further.

Earlier this year, GM emerged from bankruptcy and introduced a series of well-received vehicles. Unfortunately, the recalls and controversy surrounding the brand have worked to overshadow and negate its success.

Having so many recalls, particularly in a short space of time, paired with a history of failure is proving a problem for GM. The company is still trying to rebuild its reputation after its near collapse in 2009, in which it relied on governmental bailout. This has worked to undercut credibility and has left the organization in a far more vulnerable position than that of its competitors, its weaker brand image and reputation meaning that GM will struggle to weather this crisis easily.

Although GM’s recalls are usually the result of larger collateral damage, its weaker reputation becomes evident when looking at the National Highway Traffic Safety Administration’s index for 2013. Toyota placed at the top of the list, recalling 5.3 million vehicles to GM’s 758,000; yet Toyota has the better reputation.

GM’s only option is to mitigate damage and distance itself from the “old GM;” which it has been trying to do for years. As it stands, the organization is associated with failure and will continue to lose members of its customer base to its competitors. In order to address this crisis effectively, GM will need to maintain an open discourse with its consumers and ensure it can handle online and offline comments, complaints, and queries at a significantly increased volume.

The circumstances, however, require more than communication alone – particularly as GM has been in similar situations where it has said the right things but has failed miserably in applying them. The brand will need to take effective, decisive action to safeguard its credibility and recovering reputation. This action will need to be carried out in a transparent, visible way to appease an incredibly cynical public.

GM has already started the process by issuing an apology to those affected by the recall. However, Mary Barra’s blanket apology in front of Congress isn’t enough. GM will need to focus on apologizing to those who lost family members. The apologies will need to come from the CEO herself in order to reflect the severity of the situation, and should be made on a personal basis; either by letter or in-person visit. In addition, GM will also need to distribute information on how long the issue will take to correct in full, which will provide a reasonable timeline and establish realistic expectations in its consumer base.

As said before, GM’s communication will also need to be paired with action. It’d benefit the brand to provide its consumers with new, or rental, defect-free cars lessen inconvenience in the interim. Although each replacement car would need to fit individual consumer needs, proving quite a feat, it would allow the defective vehicles to remain parked, stemming any additional damage or fatality reports. This would allow GM to fix the issue at a less-pressurized pace and would establish a degree of goodwill, reinforcing GM’s dedication to its customers.

This crisis, however, should be used as an opportunity to improve quality control amongst products and attempt to regain a degree of trust. Thorough internal reviews to investigate why the ignition switch defects were not reported sooner will be needed to restore a degree of consumer confidence. If the fault lies with the lead designer, the organization may wish to consider distancing itself from Ray DiGiorgio.

Regardless of how GM responds to the issue, its consumers will view its next moves as indicative of their importance and priority. GM will need to take full accountability for the situation, acknowledging its wrongdoing, and will need to do so in a very public way.

… Or it could just wait for Britney to shave her head again. That’d throw it off the front page. Just remember to send her a gift basket and a thank-you card.